UN-Documenting a Vessel By Jonathan Breithweight

Who would think that falling in love would necessitate un-documenting their boat? It happened to me, and the process was so convoluted that I thought NFTB readers might benefit from my experience. As an American recently married to a British citizen, I wished to add my wife’s name to our boat’s state registration and title. The process at first seemed rather straightforward until I learned that only American citizens are permitted to own documented vessels. Un-documenting my vessel was therefore required before I could add my wife’s name to the boat’s title and state registration. Before going any further, however, let me provide a brief summary of the reasons why someone might choose to document and/or register and title a boat in the first place.

Documentation as a Prerequisite for Obtaining a Mortgage

Coast Guard documentation is available for vessels of 5 or more net tons, and is generally required by lending institutions as a prerequisite for obtaining a boat mortgage. Documentation allows a lender to obtain a preferred “maritime lean”, which has priority over other leans. If you have a mortgage on your vessel then you probably needed to document the boat to satisfy the bank.

If not required by a mortgage company, the choice of whether or not to document a boat is up to the vessel’s owner, however only vessels owned entirely by American citizens may be documented.

Travel to Foreign Ports

Owners may wish to obtain a Certificate of Documentation if they plan to cruise outside the US, as documentation eases the process of clearing customs in foreign ports. Documentation is treated as a form of national registration, and identifies the vessel’s nationality.

State Registration and Title v. Documentation

In some states a documented vessel does not need to be registered or titled, making documentation for multi-year owned vessels less expensive than state registration (annual documentation renewals are free). Some states require a state registration and title despite documentation, making documentation an added cost. Documentation does not affect state tax liability.

The Benefits of Boat Co-Ownership by Spouses

Why you ask would a married couple want both their names on the boat’s ownership papers? Having both spouses’ names on ownership papers makes it easier (or even possible) for one spouse to legally manage the vessel if the other spouse dies or becomes incapacitated, especially in foreign ports. Co-ownership may also play a part in estate planning.

Documentation is not available when one spouse is a non-American citizen and both wish to be listed as owners. In such a situation, if the boat is documented in one spouse’s name it needs to be “un-documented” prior to both spouses obtaining a state registration and title.

The “Un-Documentation” Process

Before issuing a “Letter of Deletion” the Coast Guard (“CG”) requires proof that a boat is not encumbered (has no mortgages or liens). If a previous mortgage was part of the original documentation then proof that it has been paid off must be in a particular form.

All communications with the CG regarding the process can be handled by email or fax…even the payment of required fees. In my case, after sending the CG the “Mortgage Payoff” letter I received from my bank, along with the required fee, I received the following denial letter.

The CG attached a sample “Satisfaction Letter”, which my previous bank needed to complete. Unfortunately, because this process of “un-documentation” is rare, no one at the bank had ever seen such a form or was willing to complete it. Instead, the bank issued an official “Satisfaction of Mortgage” certificate (see below).

Upon receipt of the above document the CG issued an “Evidence of Deletion form United States Documentation” letter, which was required before the state would add my wife’s name to our registration and title.

The CG was very helpful, and was available to answer my questions both by phone and via email. Their documentation website (http://www.uscg.mil/hq/cg5/nvdc/) is easily navigated and, along with their telephone and email support, provided all the information I needed to complete the process.

Now that all the paperwork is done my wife informs me that she intends to become an American citizen. Perhaps my next article will be a review of the documenting process after a boat has been un-documented. All this proves, once again, that boat ownership involves more than just paying the original ticket price.